- Alternative Investment Fund (AIQ) is set to commit US$12 million (around A$15.4 million) into a new fund managed by an affiliate of Warana Capital
- AIQ says the Warana 2021 Fund will continue the investment strategy of preceding 2018 and 2019 funds
- The strategy sets out to acquire interests in illiquid international investment funds in the secondary market, at discounts to their reported valuations
- AIQ's commitment represents less than 15 per cent of the new fund's total commitments
- The private equity-style vehicle will see commitments drawn down over 18-months as investments are sourced
- Alternative Investment Trust shares last traded at 11.5 cents each
Alternative Investment Trust (AIQ) is set to make a capital commitment of US$12 million (around A$15.4 million) into a new fund managed by an affiliate of Warana Capital.
With offices in New York, Sydney and London, Warana Capital is an independent alternative asset manager and a specialised buyer of illiquid fund investments.
Known as the "Warana SP Offshore Fund SPC — 2021 Segregated Portfolio" (Warana 2021 Fund), AIQ says the new fund will continue the investment strategy of Warana's prior 2018 and 2019 funds.
This strategy, it says, comprises the acquisition of interests in illiquid international investment funds in the secondary market, at discounts to their reported valuations.
AIQ expects the Warana 2021 Fund will ultimately become a diversified portfolio of international absolute return funds, with the vast majority domiciled outside Australia, unlisted, and likely in some form of liquidation.
Notably, the company's US$12 million commitment represents less than 15 per cent of the total commitments to the fund, with management fees charged for the investment to be rebated to AIQ.
Further, the private equity-style vehicle will see commitments drawn down over an 18-month period, subject to a six-month extension, and as investments are sourced.
Looking ahead, Warana Capital believes AIQ will have sufficient liquidity over the next 18 months to fund the capital called for the fund.
In particular, it expects 10 per cent of the commitment will be called in the coming months, with more than US$4 million (roughly A$5.1 million) in capital return anticipated from existing investments within the next six months.
Alternative Investment Fund shares are trading in the grey at 11.5 cents at 4:03 pm AEST.